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Econometrics Exam 1 Take home Assignment

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Question;Use the data set CEOSAL2.RAW. Here ceoten: prior number of years as company ceo,salary: annual compensation in thousands dollars, sales: annual sales in million dollars, mktvl:market value of the firm in million dollars.a) Estimate the model: log(salary) is dependent variable and ceoten is the independent variable.Interpret the coefficient of ceoten.b) Estimate the model: log(salary) is dependent variable and ceoten, log(sales) and log(mktvl)are independent variables. Interpret the coefficient of ceoten.c) Test the null hypothesis that the coefficients of log(sales) and log(mktvl) are simultaneouslyequal to 1. Comment on your finding.d) Run the model in part b using the last 88 observations. Compare the standard error of thecoefficient of ceoten under the reduced sample size and under full sample. How is this related tothe size of the corresponding samples?e) Find the 99% Confidence Interval for the coefficient of ceoten.

 

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